Unmesh Sharma, Head of Institutional Equities at HDFC Securities, holds a strong conviction about a multiyear cycle unfolding in the real estate sector.

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In his model portfolio, he maintains the largest overweight position in Sobha Developers. His positive outlook extends to other industry giants, as he continues to favour DLF and Prestige Estates.

“We believe there is a multiyear cycle playing out in real estate. We have the largest overweight position on Sobha Developers in our model portfolio,” he said.

The way to do that is to look at the companies where leverage will come off in the first part of the cycle. This is also in the residential space because that is where the strength is, he told CNBC-TV18.

He continues to remain positive on DLF and Prestige Estates.

He is also positive on the exchanges. “BSE – we think that there is going to be a market share gain story, a multiyear story which is playing out and the other is MCX,” he said.

In terms of markets, he believes that there is no sharp correction in the market because the global markets are not seen coming off a cliff.

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“Similarly, India tends to stand out because while valuations are high, the external vulnerability is low and on top of that there are companies which are delivering numbers. So the clear view which is coming out is that valuations will hold in the smallcap and midcap space because domestic flows are good, especially for companies which will continue to deliver on earnings,” he explained.

He believes bottom-up stock picking has to be done in the context of where earnings will come through and where they will continue to remain strong and not disappoint.

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(Edited by : Shweta Mungre)